Would You Be Crazy To Invest In Shares Of Sirius XM?
Many speculators are asking the question, what about Sirius XM shares? To claim this stock has been volatile over the last 12 months would be putting it lightly. Sirius XM has seen a drastic decrease in share price recently, but also manages to be one of the most actively traded stocks on the market daily on a number of shares basis.
The cost is intriguing to investors, usually less than one dollar. So people jump in head first, thinking that as the market improves, they are going to make a killing on this stock. It is important to recognize though, that share prices of this stock are not going to ever increase ten fold as some antsy investors may think.
This is largely due to the cost of the subscription itself. If memberships are declining, as they have been in recent months, and the average user pays about $10 per month as a membership fee, there is just not a huge chance of this stock making you tons of money.
Sirius does have its stake in the market. A few years ago, this was a completely untapped market, and now Sirius owns that industry. Since vehicle purchases have declined and current users have tightened their spending, Sirius has seen a slight decline in users. But it is predicted that new car sales will increase and the economy will lighten, and this problem may not have much affect on Sirius.
The other good thing Sirius is doing to keep people interested is introducing new products. They are introducing online music streaming, which charges monthly fees as well. This will help to keep investors interested and banking on its increase in profitability.
Sirius is not predicted to decrease to its lowest price yet of about $.05 per share, but it is also not predicted to go up too much higher than $1 or $1.50 over the next 12 months, just because of the low cost of subscription and the fact that the number of subscribers is not increasing.
So while it may not be the markets greatest stock to bank on, it is certainly a strong choice to help diversify your portfolio. They have weathered the economic decline and have remained relatively debt free, and when investors ask you “what about shares of Sirius XM?”, it is important not to get too overly excited about its prospects, but we shouldn’t count this one out of the game yet.
UPDATE: As of October 7, 2009 the Wall Street Journal reports that “five top executives at Sirius XM Radio Inc. disclosed their intention to sell them all upon vesting. So far, they have sold seven million shares for nearly $3.2 million.”
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